Sales Management

Managing the sales effort

Sales management: Activities of planning, organizing, staffing, motivating compensating, and evaluating and controlling a sales force to ensure its effectiveness

Boundary-spanning role: role performed by a sales manager in linking the sales force to other elements of the organization’s internal and external environments

How Salespeople and Sales Managers Spend Their Time

One of the sales manager’s greatest challenges

Careful selection is important for two reasons:– Substantial costs involved

– Mistakes are costly and detrimental to customer relations and sales-force performance

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Making the sales effort

Principal methods used are on-the-job training, individual instruction, in-house classes, and external seminars

Popular training techniques include instructional videotapes, lectures, roll-playing exercises, slides, films, and interactive computer programs

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

General organizational alignment may be based on geography, products, types of customers, or some combination of these factors

National accounts organization: organizational arrangement that assigns sales teams to a firm’s largest accounts

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Basic Approaches to Organizing the Sales Force

Span of control: the number of sales representatives who report to the first level of sales management

Optimal span of control is affected by such factors as complexity work activities being performed, ability of the individual sales manager, degree of interdependence among individual salespersons, and the extent of training each salesperson receives

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Efforts to motivate salespeople usually take the form of the briefings, information sharing, and both psychological and financial encouragement

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Psychological encouragement includes appeals to emotional needs, recognition, and peer acceptance

Financial encouragement includes monetary rewards and fringe benefits such as club memberships and sales contest awards

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Commission: incentive compensation directly related to the sales or profits achieved by a salesperson

Salary: fixed compensation payments made periodically to an employee

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Annual Pay for Sales Representatives and Sales Managers

Sales: level of expected sales for territory, product, customer, or salesperson against which actual results are compared

Other measures such as customer satisfaction, profit contribution, share of product-category sales, and customer retention are increasingly being used

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Another way to categorize a salesperson’s strong points:– Task, or technical ability– Process, or sequence of work flow– Goal, or in results (output) of sales

performance

Compensation Evaluation and Control

Evaluation and Control

Recruitment and Selection

Training

Organization

Supervision Motivation

Managing the sales effort

Ethical issues in sales Promotional activities, including personal

sales, raise many ethical questions Sales managers create and ethical sales

environment by:– Promoting ethical awareness

– Making sure that all employees

know that the firm opposes unethical conduct

– Establishing control systems to monitor ethical conduct

Ethical Dilemmas

Ethical breaches that occur between salespeople and their employers include:– Improper use of company assets and cheating– Sexual harassment– Using bribes to secure a sale

Customer demand for cash kickbacks represents another ethical dilemma

Strategic Implications

– Today’s sales force is strength and through technology

– However, nothing can replace the power of personal selling in generating sales and building strong, loyal customer relationships

Managing the sales effort

Sales force management

Environmental pressures leading to changes sales management include:

More sophisticated buyers Customer and supplier data linked via computerized data

warehousing systems New technology and making alternative distribution methods

possible Automatic inventory reorder processes reducing the need for

personal selling Accelerated product life cycles Reduced customer loyalty in some markets